London property info - rental flat expertise needed please

[Earlybird]

We left London (and the UK) last summer, and rented our flat privately (i.e., not through an agent). I will shortly be having a conversation with the tenants about renewing their lease.

I read a great deal about the dramatic slowdown in the property market, but as I'm not in the UK can't gauge for myself. What is the current market for rentals? Has the rental market slowed dramatically? Are prices dropping, or simply not increasing as quickly?

Finally, what is the typical annual % increase for rental properties, and does that % hold true in the current market?

I definitely want the tenants to renew, but would appreciate any guidance so that I can negotiate intelligently/realistically. Thank you.

Have a look at other local, comparable rentals.

Calculate how much you like the tenants (a lot, obv) and the cost of remarketing etc. Come up with a figure that takes into account the above, and increase in cost of living and change of mortgage rates (if applicable)

I rented somewhere for over 2 years without the rent increasing at all. I may have been v lucky though.

I rarely put the rent up for sitting tenants. Not worth the aggro.

I have a one bed flat in London which I have let out through a mainstream agent for the last 8 years or so. To be honest the rent has risen very little (and I mean very little) over the years. it's definitely a tenant market.

I think rental prices have increased if anything. More people are reluctant to buy right now so there is more demand for rent.

I would say to keep it the same, or a small increase.

Hmmm - I'm not definite about wanting to increase the rent. They're good tenants, but I'm a good landlord and they're getting a very good deal atm. They won't be able to duplicate it elsewhere, I shouldn't think.

Is there much rental inventory on the market atm? I've been looking at Primelocation, but it's difficult to gauge the market being so far away.

London market is so localised it's difficult to generalise. We have DH's old batchelor pad in Clapham which we've rented out ourselves for the last five years. I'd say that rents have only been going up very slowly. Good sitting tenants are hard to find, I'd be tempted, if you are going to put it up at all, to go for a basic inflationary increase. Wouldn't say prices are dropping.

If anything with banks so cautious about lending more than 90% LtV, the first time buyers are priced out of mortgages and so the rental market is picking up slightly.

Don't put rent up unless you have increased costs. Good tenants are hard to find and you need to consider the re-marketing hassle and the possibility of your place being empty for a while. If you really think current tenants are paying below market rate (not difficult to find out, surely, all those property websites out there) put rent up by token amount, say £30/month. Good tenants worth their weight in gold imho. I had fantastic tenants in flat of mine and didn't put their rent up in 3 years. I just wanted them to stay.

My DD has been in a house in London and the rent has stayed the same for three years.

Where in London is the flat?

Flat is well situated (zone 1) in a lovely building, and is in good condition - so would be considered 'desirable'.

Bumping for daytime crowd....

Having rented in London for a good few years I haven't ever experienced a rise in rent. However, there is demand in the market if it is in a good area, good condition etc. We've currently been looking in Zone 2 - South West London and most properties that are well priced, near station with nice decor were going within a couple of days.

I think you would be fine with a small increase (£20-£30 per month maybe?) as at that amount it is still cheaper for tenants to stay put than it would be for them to move out. Likewise you aren't spending money on agents fees, contracts etc.

I have been a rental tenant half a dozen times, but mostly in America, where regular rent increases are to be expected.

This is my first experience as a landlord in the UK, so it is valuable to hear that rent increases when leases are renewed are not the norm.

Any other insights to current rental market/inventory?

We're renting in south-east London and have been paying the same (pretty cheap) rent for 4 years now. Landlord has been in business 20 years, his company owns over 100 properties and he knows good tenants when he has them... Can't complain about them either as they've been very good.

Thanks for all the feedback/perspective.

Have now spoken to the tenant, who very much wants to stay (whew!). He even volunteered that he'd consider an increase! Sounds as if he and his wife want to stay as much as I'd like them to. Might propose a small increase at some point in the future.

I think he is aware what a good deal they're getting (he'd been looking in the area before our discussion), and I'm aware of just what good tenants they are.